Wednesday, November 17, 2010

A Fairly Quiet Day Awakens Warren Buffett

Ireland didn't accept the EU or IMF offers for a bank bailout, nor did they default on their debt, and the mortgage/housing/foreclosure problems also didn't go away because the AGs of 50 states are in negotiations on a settlement with the banks.

But Warren Buffet's fawning praise for the worst scoundrels in the government, published today as an op-ed "letter" from "Nephew Warren" to Uncle Sam raised more than just eyebrows around the financial world and in the public conscience.

Buffet, one of the world's richest men, benefitted greatly from the 2008 bank bailouts, snatching up a piece of Goldman Sachs (about $5 billion worth) and Wells Fargo, putting the Oracle of Omaha clearly in the camp of the serial monetary abusers atop our grand government/industry pyramid.

His effort at humor or insight was simply lost on most people, especially those wh have been kicked out of their homes, lost jobs or simply are having trouble making ends meet in the worst economy since the Great Depression. Buffet singled out Hank Paulson, Sheila Bair, Tim Geithner, George W. Bush and Ben Bernanke for acting with "courage and dispatch" amidst the evolving crisis.

The piece came as somewhat of a surprise from Buffett, normally fairly apolitical, expressing thanks from a government of which he is often critical.

Other than that, the Fed pumped another $7..9 billion into the primary dealers and stocks stalled once again. So far, even though it's still early in the game, the Fed's QE2 hasn't amounted to much of anything, and since the money goes to banks, who will likely keep it rather than lend it, it isn't going to do anything. In truth, QE2 is nothing more than a backdoor bailout for the banks suffering with heavy real estate losses both on and off their books. But, who's looking?

Dow 11,007.88, -15.62 (0.14%)
NASDAQ 2,476.01, +6.17 (0.25%)
S&P 500 1,178.59, +0.25 (0.02%)
NYSE Composite 7,488.76, +16.13 (0.22%)

Advancing issues led decliners, 4719-2726, and new highs took back the advantage from new lows after relinquishing control for a day, yesterday, 179-80. There's quite a bit of pumping in individual issues keeping the lows and highs separated at this point. Obviously, with options expiration just two days off, there's plenty of arbitrage between stock prices, puts and calls to call this any kind of "orderly" market. It is anything but.

Volume continued in the doldrums as it has for the entire year.

NASDAQ Volume 1,836,918,250.00
NYSE Volume 4,508,769,500

Oil continued to nosedive, losing another $1.90 on the day, to $80.44. It had been nearly 90 just a week ago. Gold fell $1.50, to $1,336.90. Silver bucked the trend, up 28 cents, to $25.51.

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